H&M Henes & Mauritz AB (Stockholm) has announced it will finally begin selling goods online in the U.S.
The popular “cheap chic” retailer, which has been selling goods over the Internet in its native Sweden for 15 years, said it will enter the world’s biggest online apparel market in August.
However, notes Bloomberg News, H&M has announced and then postponed the same intentions twice before.
Speculation is that H&M is trying to match the success of its biggest competitor, Zara, owned by Inditex SA (Arteixo, Spain), which overtook H&M in 2006 as Europe’s biggest apparel seller and has topped the Swedish company’s sales growth for the past three years.
Since 2011, when Zara began selling online in the U.S., the American market for apparel and accessories online has grown an estimated 44 percent to $54 billion. Inditex now offers Internet sales in 23 markets while H&M does so in eight.
H&M’s nearly 300 stores in the U.S. now account for 9 percent of the company’s total revenue, its second-biggest market. But despite the rapid expansion in 13 years, 17 states have no local outlets.
And it has developed strong brand recognition even in cities where it doesn’t have stores, according to Bank of America Merrill Lynch. “There should be pent-up demand,” said Merrill analysts Richard Chamberlain and Aurelie Caspar. They say H&M’s U.S. website now accounts for about 20 percent of the company’s total online traffic, even though it offers no goods for sale.